November Conference Call: 5 Key Takeaways
1. "And now here's Copper breaking out as we speak. If Copper is above 541, the next leg higher has begun. Target above 650."
Click on chart to enlarge view.
The correction in Copper has taken place through time, rather than price. Zinc is pressing to new highs and Copper is likely next. If prices break above 541, we can be long with an upside target near 654.
2. "Now let's talk about what's going to drive the Indian stock market. Well, the top 10 stocks in the Nifty 500 represent 43% of the index. So if the market is going to go higher, these are the stocks that are going to drive it. And they're going higher."
The largest stocks in a top-heavy market-cap-weighted index will either be a major headwind for a major tailwind for Equities as an asset class. Right now with the largest stocks in an uptrend, it is a major tailwind for Equities.
3. "If Fast Moving Consumer Goods' stocks were ever going to start outperforming, this would be a logical place for that to begin."
We're watching this sector closely to see if it can get going after a massive decline since April. There are some stocks showing relative strength in the sector, so we're focused on those.
4. "And speaking of risk, we can't have a conversation about bull markets in stocks without Financials. We're seeing new recovery highs across the globe."
Financials have been a major headwind for stocks around the globe, given their large weighting in a lot of the major indices and lackluster performance on an absolute and relative basis.
That's changing as money rotates into weaker areas of the market, which is a positive for stocks in general.
5. "This is a consistent performer on an absolute and relative basis and should remain so over the long-term."
If you're looking for Bank stocks with well-defined risk, HDFC Bank recently made new all-time highs. If prices are above 1,240, the bias is higher towards 1,960.
We hope this gave you some perspective on the topics we're focused on in the current environment. There are clear trends across various asset classes that we want to continue taking advantage of.
If you missed this 90+-slide presentation, you can watch the recording and view our Trade Ideas Page for a summation of the ideas discussed.
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